Sugar has its tobacco moment as voters call for new tax

By Peter Martin

Updated17 January 2018 — 6:39pmfirst published at 11:20am

Imagine a tax that Coalition voters actually wanted. They certainly don't want more income tax (only 12 per cent do, according to an Essential poll), they certainly don't want more company tax (they want less) and they will cop an increase in GST only if it brings down other taxes.

But then there is sugar. This week's Essential poll reveals the sort of disdain for sugar there is for tobacco.

It is sugar's tobacco moment. When the tobacco question was asked two years ago a massive 70 per cent of Coalition voters wanted higher taxes on it along with 67 per cent of Labor voters. For both tobacco and sugar, it's the university-educated Coalition voters who want the higher taxes the most.

Illustration: Dionne Gain

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What has sugar done to get lumped in with perhaps the most despised legal substance on the planet?

Nothing it hasn't been doing for decades. It is just that it is doing more of it and we are learning more about what it is. The industry would like us to believe that obesity and the tragic diseases that follow are simply a matter of "energy in and energy out". Those are the words it uses.

Put less into your mouth, do more exercise, and you won't get as heavy.

Refined, dissolved sugar hits our bodies instantly, which is why soft drinks are being taxed on a worldwide scale not seen since cigarettes.

Photo: Bloomberg

It is what I call the "federal budget" approach to maintaining weight. If only the government spent less and taxed more it would bring down the deficit. It sounds true only because it ignores feedback loops.

When countries such as Spain and Italy imposed austerity programs after the financial crisis, they did indeed cut spending, but they also plunged their economies into deeper recession, losing even more revenue.

Sugar sets off the same sort of feedback loop.

It is true that heavy people eat more than others and exercise less, but the causation is not all one way.

An extraordinary 57 per cent of Coalition voters want a tax on tax on sugar sweetened drinks

It is easiest to see in children. They eat more during growth spurts, but it is not right to say their growth spurts are caused by the extra eating. It is truer to say that whatever it is that brings on their growth spurts does it by bringing on their extra eating.

Here's another example. Someone with an aggressive tumour will eat more in its early stages. That is because the tumour grabs the incoming nutrition for itself, making the host heavier but weaker and hungry for more food. It is as true to say that the extra weight brings on the extra eating as it is that the extra eating brings on the extra weight.

For sugar, the budget analogy misses the point. The point is that our bodies respond to sugar with insulin.

Rosalyn Yalow won the 1977 Nobel Prize for tracking what insulin does. When it is released, our fat cells start to pack in fuel in the form of fatty acids, and close their walls to prevent them escaping. It is why, bizarrely, we often feel weak or hungry after taking in sugar. The energy we expect to get is rendered inaccessible until the insulin dissipates.

And so we are likely to take in more sugar, triggering another flood of insulin, and so on. If we are especially unlucky, the repeated floods of insulin build up our resistance and encourage our bodies to produce more and more insulin until they exhaust their capacity, meaning we need to take it intravenously.

It is worst for refined, dissolved sugar. It is relatively new in terms of human biology and it hits our bodies instantly, which is why soft drinks are being taxed on a worldwide scale not seen since cigarettes.

Twenty-six countries including Mexico, Portugal and Thailand already have in place a punitive tax on soft drinks. Five more will put one in place by April, including Britain.

Introducing the the legislation in 2016, Conservative chancellor George Osborne warned that within a generation, half of all boys and 70 per cent of girls would be overweight or obese.

"I am not prepared to look back at my time here in this parliament, doing this job and say to my children's generation: 'I am sorry, we knew there was a problem with sugared drinks, we knew it caused disease, but we ducked'," he said.

The British tax is ingenious. It will apply at two different rates. Drinks with less than 5 per cent sugar won't face it at all. There is a pay-off for getting concentrations below 5 per cent. Schweppes lemonade has already done it.

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In Mexico, sales of sugared drinks dropped by 5.5 per cent in the first year and then 9.7 per cent. In Berkeley, California, which imposed a city-wide tax, sales dived 9.6 per cent.